Main menu

Secondary menu

What is CMFI? We are a shareholder advocacy organization dedicated to promoting the interests, needs, and concerns of individual mutual fund investors. Learn more

CMFI Studies

CMFI Study on Investor Costs in Section 529 College Savings Plans

On January 30, 2012, the Coalition of Mutual Fund Investors (CMFI) released a study on the costs and expenses of investing in Section 529 college savings plans.
Using public information, this CMFI study compared the fees and costs of making mutual fund investments in a state 529 plan directly, with the fees and costs of making the same investments in a state 529 plan through a financial intermediary, such as a broker-dealer or a financial advisor.
CMFI’s study concluded that the fees and costs of investing in the state 529 plans through a financial intermediary are, on average, more than twice as expensive as the fees and costs of investing in state 529 plans directly. While there are a few 529 plans that may be cost-effective by themselves, an investor is far better off investing in almost any of the 529 plans that are sold directly, at least when comparing the fees and costs of a 529 plan investment.

On August 18, 2010, CMFI issued a White Paper documenting the costs to shareholders of hidden mutual fund accounts managed by large broker-dealers and other intermediaries.This CMFI White Paper concluded that as much as $8.47 billion is being charged to fund shareholders each year to pay for shareholder servicing and recordkeeping activities in these hidden accounts.

On October 12, 2009, CMFI issued a White Paper documenting the costs to shareholders of hidden mutual fund accounts managed by third-party financial intermediaries.This CMFI White Paper concluded that as much as $9.6 billion is being taken from fund shareholders each year to pay for shareholder servicing and recordkeeping activities in these accounts.

On June 20, 2007, CMFI released its third study evaluating the short-term trading policies of the 50 largest mutual fund groups. The study concluded that it is impossible for mutual funds to uniformly enforce their excessive trading policies because of a lack of transparency in omnibus accounts held by broker-dealers, financial advisers, retirement plans, and other third-party financial intermediaries. As a result of the conclusions reached by this study, CMFI recommends that: (1) financial intermediaries should disclose omnibus account information to mutual funds on a same-day basis; and (2) the Last In, First Out ("LIFO") accounting method should be required for the calculation of mutual fund redemption fees.

On May 5, 2005, CMFI released its second study examining the 50 largest fund groups for their use of redemption fees and other mutual fund policies aimed at deterring short-term trading. The study found that it is impossible for mutual funds to effectively enforce their policies because many of their customers are concealed in third-party omnibus accounts. These results are similar to those found in a 2004 study conducted by CMFI. As a result of the study's results, CMFI recommends the following: (1) financial intermediaries should disclose omnibus account information to funds on a daily or transactional basis; and (2) the LIFO (Last In, First Out) accounting method should be required for calculating redemption fees.

CMFI 2004 Study of the Market Timing Policies of the 50 Largest Mutual Fund Groups

On August 3, 2004, CMFI released a study examining the redemption fee and market timing policies of the 50 largest mutual fund groups. The study concluded that these fund groups are unable to monitor or regulate market timing activities in omnibus accounts, which are shareholder accounts held by third-party financial institutions. The results of the study demonstrate the need for full transparency regarding the identities and trading activities of shareholders in these third-party omnibus accounts.